Adds close of European markets

By Chuck Mikolajczak

NEW YORK, Jan 31 (Reuters) - A gauge of global stocks rose on Tuesday while U.S. Treasury yields mostly fellas investors assessed economic data and earnings reports ahead of a run of central bank policy announcements.

On Wall Street, U.S. stocks were higher, reversing declines in equity futures after data showedlabor cost growth in the fourth quarter was the smallest in a year, at 1.0%, even in a tight labor market. Other data showedconsumer confidence eased in January, as inflation expectations for the next 12 months climbed to 6.8% from 6.6% last month.

The Federal Reserve is widely expected toraise interest rates by 25 basis points (bps) at the conclusion of its two-day policy meeting onWednesday. Investors will closely monitor comments from Fed Chair Jerome Powell following the announcement for clues on the path of monetary policy. FEDWATCH

"The Fed tomorrow will have to strike a delicate balance in signaling slowing in the pace of rate increases, while at the same time emphasizing that they're not done yet with tightening rates," Oscar Munoz, U.S. macro strategist at TD Securities, told the Reuters Global Markets Forum.

"It has to acknowledge the recent improvement in the inflationdata, but also note that the job's not done yet despite the recent good news."

The Dow Jones Industrial Average .DJI rose 228.15 points, or 0.68%, to 33,945.24 , the S&P 500 .SPX gained 37.97 points, or 0.95%, to 4,055.74 , and the Nasdaq Composite .IXIC added 137.22 points, or 1.2%, to 11,531.04 .

The S&P 500, up about 5.2% for the month, is on track for its first January gain since 2019.

Interest rate announcements from the Bank of England and the European Central Bank are scheduled for Thursday, with both seen as likely to hike rates by 50 basis points.

Markets will also grapple with a host of U.S. economic data this week, culminating in Friday's payrolls report for January. Investors see signs of weakening in the labor market as a key factor in bringing down high inflation. Other data this week include gauges of the manufacturing and services sectors.

In addition, more than 100 S&P 500 companies, including market heavyweights Apple IncAAPL.O, Amazon.com Inc AMZN.O and Google parent Alphabet GOOGL.O, are scheduledto report results this week.

Caterpillar CAT.N andMcDonald's MCD.N both lost ground on Tuesday following their quarterly results. However, Exxon Mobil rose after posting a $56 billion net profit for 2022.

Europeanshares retreated ahead of the central bank meetings to end the month on a down note, but still notched their biggest January percentagegain since 2015. Economic data for the euro zone showedslight growth for the fourth quarter, but further weakness is expected this year.

The pan-European STOXX 600 index .STOXXlost 0.26%, and MSCI's gauge of stocks across the globe .MIWD00000PUSgained 0.39%. MSCI's index was on pace for its biggest January percentage gain since 2019.

Benchmark U.S. 10-year notes US10YT=RR weredown 2.9 basis points to3.522% in the wake of the data, after hitting a two-week high of 3.574% on Monday.

In currencies, the U.S. dollar index =USD, on track for a fourth monthof declines, fell 0.196%, with the euro EUR=up 0.22% to $1.0868.

Oil pricesrecovered from earlier lows, as U.S. crude CLc1 recentlyrose 0.81% to $78.53 per barrel and Brent LCOc1 was at $84.47,down 0.51% on the day.

Reporting by Chuck Mikolajczak; additional reporting by Lisa Pauline Mattackal; editing by Diane Craft and Leslie Adler

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